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Scholars and policy makers believe that democracy will bring prosperity through integration into the global economy via increased international trade. Existing research is plagued by methodological problems that obscure the empirics and avoid the theoretical problem of why democracies may or may not trade more. In this paper, I seek to correct these shortcomings. I test two theories as to why democracies might trade more. First, political freedom may be correlated with economic freedom, thus prompting higher levels of economic activity, thereby driving states to trade more. Second, democracy implies higher quality governance either through institutions or policy making procedures. To test the impact of democracy on trade and the potential transmission mechanisms, I utilize a bilateral gravity trade model covering approximately 150 countries from 1950 to 1999, with fixed effects for time, importers, and exporters. I find the theory that democracy, and many of its components, promotes international trade unconvincing. The coefficients are the theoretically correct sign; however, many are statistically or economically insignificant and fragile to changes in modeling or data. Economic freedom does not have the expected impact on international trade levels, but quality of governance variables have broad economic and statistical significance.

Research has called into question the impact of the World Trade Organization (WTO) on trade. This research, however, has been called into question on both modeling grounds for and failing to utilize comprehensive fixed effects. Others have found that when these factors are accounted for, imports rise by significant amounts. This paper seeks to reconcile these findings. I find that the WTO has a larger, though uneven, impact on exports than imports. The results indicate that the WTO frequently causes imports and exports to move in opposite directions negating any increase in overall trade. The regressions with and without fixed country effects generally demonstrate pattern consistency for generalized results that are robust to change. Owing to the finding that imports rise modestly or even fall without country effects while exports rise, the results imply that countries may not be as interested in liberalizing trade as selling to the world. Copyright � 2010 Blackwell Publishing Ltd.

The debate between pro- and anti-international adoption advocates relies heavily on rhetoric and little on data analysis. To better understand the state of orphans and potential adopters in this debate, we utilize the National Survey of Family Growth (NSFG) and the Demographic and Health Surveys (DHS) to study who adopts internationally and the status of orphaned children in sub-Saharan Africa. According to NSFG data adopters are church going, highly educated, stable families aware of the challenges faced by international adoption, with high rates of infertility and rates of child abuse half the population average. According to the DHS data, orphans in sub-Saharan Africa suffer from significantly higher deprivation, reduced schooling and increased levels of stunting and underweight reported than their cohort. Using this data, we estimate conservatively that that 1 50 000 orphans from our sample of sub-Saharan African countries died from their 5-year birth cohort. Given the large number of families seeking to adopt and the high number of orphan deaths, it seems counterproductive to restrict international adoptions given the significantly lower risks faced by children in adopted families compared with remaining orphaned.

To study the role of elections in financial market instability, we focus on the role of credit risk pricing during elections from 2004 to 2007 in 13 emerging market economies. We use a unique dataset of daily credit default swap (CDS) pricing, with standard macroeconomic controls, to study the role of elections in prompting financial market instability and contagion. Sovereign CDS pricing provides a number of advantages in understanding emerging market instability of previous studies. First, the daily data allows a greater level of specificity than was used in previous credit market and political studies. Second, even though sovereign credit conditions change slowly, CDS pricing changes daily, reflecting sentiment or forward-looking beliefs. Third, the CDS allows us to focus on the perceived public credit risk of an election and the incoming government. Our study reveals a number of unique findings. First, investors price in additional risk for elections regardless of party, incumbency or size of win. Second, long- and short-term investors price risk very differently, with 1-year CDS investors reacting much more strongly to election risk, causing the overall spread between 10- and 1-year swaps to narrow. Third, our results provide continued support for the theory of investor herding in international financial markets, and a focus on a small number of economic variables in determining sovereign creditworthiness. Investors do not study the relative risk factors as much as price in structural risk by the existence of definable benchmarks like elections.

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